rolling convertible bonds

Finally had time to follow up on my concerns re Rolling Convertible Bond!
Before I express further concerns on this subject it is worth reflecting on the history of this Bond and some details!! I apologize in advance for simplification of the following but to give full details you would be reading for a week!!
1. The Bond was originally announced on the 23/11/07 as novel to Australia and subsequently we were the first to engage this method of capital rising in Australia...
2. The Bonds can be issued at $1,000,000 each time and needs to be converted to Shares in the Company prior to next Tranche being issued usually within 45 days. I.E. Important to note the bonds MUST be converted to shares!
3. If the Sp goes below 15c the facility can be terminated. (This was subsequently lowered to 14.41c due to dilution from Rights Issue.
4. Now here comes the first obnoxious part in my opinion The Conversion price is 10% less than the average of the 5 lowest trading days in the past 25 trading days
Or 125% of the average 25 trading days prior to Bond being issued!!
5. The former condition has meant the conversion price being in some recent cases has been up to 40% under the prevailing SP!
6. A declining market may prevent the Bond Issuer from obtaining a margin so facility can be cancelled! (No risks to Bond Issuer here!)
7. The Directors of CTP can terminate the Bond If they feel it is detrimental to the SP... N.B. Well!!
8. The facility was voted on at an AGM with 27M votes for and 16M votes against. This is a significant NO vote compared to most Company AGM votes!
9. Now to the next Obnoxious point!! Martin Place Securities Super Fund agrees to provide Loan Shares to the Bond Issuer at 45% of SP!. This caused some concerns that were later clarified to explain it allowed the Bond Issuer flexibility between when the Bond was taken up and when the Shares were issued and available for trading INCLUDING SHORT SELLING!!
Before progressing on to the Affect these Bonds have had on the SP I must in fairness say the Directors considered this Bond Facility was the cheapest and best way to raise funds in a tight market after the world economic fallout! I dont have a lot of argument about that at the time but in hindsight I now feel it is a major depressant on the SP and should be dispensed with ASAP! Especially if the Company expects people to exercise Options which will bring in serious income from true believers!!!
Now on to the proof!!
Unfortunately I cannot despite many attempts post my charting program to this Forum... (Incredible Charts) (Be glad if someone can help!) So I will have to list time of Bond Conversions and effect on SP. You can then go look up yourself and see if I am not right!



Lets take say last six months -
Date Converted Prevailing SP Conversion Price SP 5 days later! % profit to Bond Issuer
4/8/09 8.7c 8c 8.3 8, 7%
21/08/09 8.6c 8c 8.4 7.5%
9/10/09 18c 11.7c 14.5c 39%
13/10/09 18.5c 11.79c 14.5c 23%
3/12/09 14c 12.42 15c 12.8%
22/12/09 16.4c 12.42 14 18%
Remember these percentages are over a few days not per annum!! And yes I have taken up the number of shares issued compared to turnover in the time period.
If you look at a chart the only time the SP rose in this period was 27 Aug to 8 Oct when no bonds were issued!! It rose from 9c to 19c!!
Since then we have had heaps of more positive news only to find SP is being held down by Bond Selling into a Quiet market!! Who has made money here?? CTP has raised a pittance whereas SP has been crusified!
Other significant item to note is that whenever a Bond Conversion is announced it is usually followed by a positive Announcement. Maybe Directors realize the SP will be forced down and try to counteract it with something positive BUT it does not happen!!

I challenge anyone who doubts my observations to look at a chart. Compare conversion dates with subsequent SP movements...

And finally, note at the beginning I said this Convertible Bond Issue was unique to Australia... Well go check VIL BUY MEL and many other companies reactions to positive announcements such as released by CTP and see what their SP did!! They dont have Rolling Convertible Bonds And neither should CTP Today!!
Despite the above I am a tru believer and in for long term but very annoyed that my funds are tied up in a slow moving SP when all around there is action!! (Yes I can anticipate answers to last comment.. answer is I still have long term faith!!)
BUT RUNNING OUT OF PATIENCE!
Don